Tax in Virginia: a complete guide
This article takes you through everything you need to know about your tax burden if you live in the state of Virginia.
Virginia state income tax
Virginia has a graduated state income tax rate ranging from 2 percent to 5.75 percent.
According to the Virginia Department of Taxation, these ranges are broken down as follows:
| Virginia taxable income | Tax rate |
|---|---|
| $0—$3,000 | 2 percent |
| $3,001—$5,000 | 3 percent |
| $5,001—$17,000 | 5 percent |
| $17,000 and over | 5.75 percent |
Virginia also has a flat 6 percent corporate tax rate.
If you’re unsure about filing your taxes, a financial advisor can help. Here, they can review your income sources and develop a unique tax strategy just for you.
Virginia Sales Tax
Most areas in Virginia have a sales tax rate of 5.3 percent. However, some areas impose an additional local sales tax; for example, the general sales tax rate in James City County and York County is seven percent. While in Charlotte County, it is 6.3 percent, and in the Northern Virginia areas of Arlington and Fairfax City, it is six percent.
You can visit the Virginia Department of Taxation for a full breakdown of the different sales tax rates across Virginia.
Certain items, including food for home consumption, such as groceries, and certain essential personal hygiene items, are taxed at a reduced rate of one percent.
Like other states, Virginia holds an annual tax holiday. In 2023, this runs from October 20-22. During this time, residents in Virginia can stock up on qualifying school supplies, clothing, hurricane and emergency preparedness supplies, and certain ENERGY STAR™ and WaterSense™ products without paying state sales tax.
Virginia Property Tax
Virginia’s personal property taxes and real estate taxes are local taxes. This means local cities, counties, and towns administer, calculate, and collect them. The property tax rates will differ depending on where you live, for example:
| County | Homeowners tax rate |
|---|---|
| Fairfax County | $1.095 per $100 |
| Prince William County | $0.966 per $100 |
| Arlington County | $1.013 per $100 |
| Loudoun County | $0.875 per £100 |
Virginia Motor Tax
According to the Virginia Department of Motor Vehicles, when buying a vehicle in the state or when a vehicle changes ownership, you must pay a Sales and Use tax of 4.15 percent.
The amount paid is based on the vehicle's gross sales price, or $75, whichever is greater.
Virginia Estate Tax
Virginia does not impose estate or inheritance tax.
While residents in Virginia do not have to pay state estate taxes, it’s important to remember federal estate tax will apply if your estate is above a certain threshold ($12.92 million in 2023). Residents should also be aware should they inherit an estate from someone living in a state that does import estate taxes, they may need to comply with that state’s specific regulations.
Virginia Retirement Tax
When it comes to taxes, Virginia is considered a tax-friendly state for retirees, with relatively low taxes compared to other states.
Social Security benefits are exempt from state income taxes.
Other forms of retirement income, including income from 401(k)s, pensions, and traditional IRAs, are taxable. As the Virginia Department of Taxation states, “With a few exceptions, if a source of income is taxable at the federal level, it’s taxable to Virginia as well.”
The state does offer qualifying retirees deductions on their taxable income. Those born on January 1, 1939 or earlier can subtract $12,000. Those born after this date's deductible amount is based on their income.
For further tax guidance and to ensure you’re not paying more tax than you need to, it’s wise to speak to an expert. A financial advisor can help you handle all your tax queries and ensure you’re not paying more tax than needed.
Senior Content Writer
Rachel is a Senior Content Writer at Unbiased. She has nearly a decade of experience writing and producing content across a range of different sectors.